Great Panther Silver Reports Fiscal Year 2016 Financial Results
Canada NewsWire
VANCOUVER, Feb. 27, 2017
TSX: GPR
NYSE MKT: GPL
VANCOUVER, Feb. 27, 2017 /CNW/ - GREAT PANTHER SILVER LIMITED (TSX: GPR) (NYSE MKT: GPL) ("Great Panther"; or the "Company") today reported financial results for the Company's year ended December 31, 2016. The full version of the Company's consolidated financial statements and Management's Discussion and Analysis ("MD&A") can be viewed on the Company's website at www.greatpanther.com or SEDAR at www.sedar.com. All shareholders can receive a hard copy of the Company's complete audited financial statements free of charge upon request. All financial information is prepared in accordance with IFRS, except as noted under the Non-IFRS Measures section.
Great Panther commenced reporting its financial results in US dollars as of the third quarter of 2016. Accordingly, all dollar amounts expressed in this news release, and the associated financial statements and MD&A, are in US dollars ("USD"), unless otherwise noted. Periods prior to the third quarter of 2016 were reported in Canadian dollars ("CAD"), and have been restated to USD using the July 1, 2016 CAD/USD exchange rate of 1.3052.
"Improved metal prices, combined with a 20% reduction in our all-in sustaining costs to $10.99, resulted in Great Panther delivering a 404% increase in mine operating earnings in 2016," stated Robert Archer, President & CEO. "Significantly improved operating cash flow, combined with the proceeds of financings completed in 2016, enabled us to end the year with $67 million in net working capital, no debt, and positions us well to capitalize on growth opportunities such as the recently signed Coricancha acquisition."
Improved metal prices and significantly lower costs drove substantial improvements in margins and cash flow in 2016, including a $17.6 million increase in mine operating earnings. Despite the substantial increase in mine operating earnings, the Company reported a net loss of $4.1 million for 2016, mainly due to foreign exchange losses of $11.1 million. The majority of the foreign exchange losses are non-cash and relate to the revaluation of foreign-denominated assets and liabilities, including certain intercompany balances, for fluctuations in exchange rates. These primarily arose in the first half of 2016 prior to change-over from Canadian dollar to US dollar reporting and related changes in functional currencies of some of the Great Panther group companies. The 2016 financial results also reflected a $1.7 million write-down associated with the termination of an option to purchase the Coricancha mine in May of 2016. Later in the year, Great Panther successfully re-negotiated and concluded an agreement to purchase the Coricancha mine.
Cash costs of $3.65 per payable silver ounce for 2016 represented a 51% decrease over the prior year, and all-in sustaining costs per payable silver ounce ("AISC") were down 20%, and both were below the Company's guidance. The decline in the Mexican peso relative to the US dollar was a significant factor in the reduction of these costs.
The construction of the Phase II tailings storage facility and related plant upgrades at the Topia Mine are progressing well, and the Company expects to restart processing before the end of the first quarter, as planned. The costs of the project will be accounted for as sustaining capital expenditures. This, along with the impact of suspended production for a good portion of the quarter, will result in adverse cash cost and AISC metrics for the first quarter. The impact on the full-year cash cost and AISC will be less pronounced. See the Outlook section for a more detailed discussion.
Fiscal Year 2016 compared to Fiscal Year 2015, unless otherwise noted:
-- Metal production decreased 7% to 3,884,960 silver equivalent ounces ("Ag
eq oz");
-- Silver production decreased 14% to 2,047,260 ounces;
-- Gold production increased 2% to 22,238 ounces, an annual record;
-- Cash cost decreased 51% to $3.65 per payable silver ounce, and was below
guidance;
-- Cash cost per Ag eq oz decreased 9% to $10.35;
-- AISC decreased 20% to $10.99 per payable silver ounce, and was also below
guidance;
-- AISC per Ag eq oz decreased 5% to $14.29;
-- Revenue increased 10% to $61.9 million;
-- Mine operating earnings before non-cash items increased to $27.7 million,
a 51% increase compared to $18.4 million;
-- Adjusted EBITDA improved to $16.5 million from $7.1 million;
-- Net loss totalled $4.1 million, compared to a net loss of $7.2 million;
-- Cash flows from operating activities, before changes in non-cash net
working capital ("NCWC"), increased to $16.0 million, from $7.0 million;
-- Cash and short-term deposits increased to $56.7 million at December 31,
2016 from $13.7 million at December 31, 2015; and
-- Net working capital increased to $66.6 million at December 31, 2016 from
$25.5 million at December 31, 2015.
Fourth quarter 2016 compared to fourth quarter 2015:
-- Metal production decreased 12% to 883,772 Ag eq oz;
-- Silver production decreased 17% to 460,571 ounces;
-- Gold production decreased 8% to 5,206 ounces;
-- Cash cost decreased 28% to $5.83 per ounce;
-- AISC increased 9% to $16.44 per payable silver ounce;
-- Revenue decreased 5% to $12.5 million;
-- Mine operating earnings before non-cash items was $4.5 million, an
increase of 19%;
-- Adjusted EBITDA amounted to $1.4 million compared to negative $0.4
million;
-- Net loss totalled $1.5 million, compared to a net loss of $3.7 million;
and
-- Cash flow from operating activities before changes in non-cash net
working capital amounted to $1.1 million, compared to negative $0.6
million.
OPERATING AND FINANCIAL RESULTS SUMMARY
Q4 2016 Q4 2015 Change 2016 2015 Change
OPERATING RESULTS
Tonnes milled
(excluding custom
milling) 92,869 94,874 (2%) 376,739 375,332 0%
Ag eq oz
produced(1) 883,772 1,002,584 (12%) 3,884,960 4,159,121 (7%)
Silver ounce
production 460,571 553,189 (17%) 2,047,260 2,386,028 (14%)
Gold ounce
production 5,206 5,637 (8%) 22,238 21,740 2%
Payable silver
ounces 488,428 502,170 (3%) 2,010,252 2,278,194 (12%)
Ag eq oz sold 883,348 921,710 (4%) 3,742,733 3,883,643 (4%)
Cost per tonne
milled(2) $ 86 $ 97 (11%) $ 88 $ 101 (13%)
Cash cost(2) $ 5.83 $ 8.14 (28%) $ 3.65 $ 7.50 (51%)
Cash cost per Ag
eq oz(2) $ 10.48 $ 11.31 (7%) $ 10.35 $ 11.32 (9%)
AISC(2) $ 16.44 $ 15.10 9% $ 10.99 $ 13.76 (20%)
AISC per Ag eq
oz(2) $ 16.34 $ 15.07 8% $ 14.29 $ 15.00 (5%)
(in 000's, unless Q4 2016 Q4 2015 Change 2016 2015 Change
otherwise noted)
FINANCIAL RESULTS
Revenue $ 12,515 $ 13,142 (5%) $ 61,881 $ 56,218 10%
Mine operating
earnings before
non-cash items(2) $ 4,476 $ 3,760 19% $ 27,728 $ 18,416 51%
Mine operating
earnings $ 2,411 $ 2,471 (2%) $ 22,022 $ 4,366 404%
Net loss $(1,498) $ (3,725) (60%) $ (4,118) $ (7,157) (42%)
Adjusted EBITDA(2) $ 1,376 $ (427) (422%) $ 16,519 $ 7,138 131%
Operating cash
flows before
changes in non-
cash net working
capital $ 1,119 $ (593) (289%) $ 15,975 $ 7,037 127%
Cash and
short-term
deposits at end
of period $ 56,662 $ 13,685 314% $ 56,662 $ 13,685 314%
Net working
capital at end of
period $ 66,560 $ 25,477 161% $ 66,560 $ 25,477 161%
Average realized
silver price per
oz (3) $ 14.99 $ 13.57 10% $ 17.15 $ 15.11 14%
Loss per share --
basic and diluted $ (0.01) $ (0.03) (67%) $ (0.03) $ (0.05) (40%)
_______________________
(1) Silver equivalent ounces are referred to throughout
this document. For 2016, Ag eq oz are calculated using
a 70:1 Ag:Au ratio and ratios of 1:0.0504 and 1:0.0504
for the price/ounce of silver to lead and zinc price/pound,
respectively, and applied to the relevant metal content
of the concentrates produced, expected to be produced,
or sold from operations. Comparatively, in 2015 Ag
eq oz were calculated using a 65:1 Ag:Au ratio, and
ratios of 1:0.050 and 1:0.056 for the price/ounce
of silver to lead and zinc price/pound, respectively,
and applied to the relevant metal content of the concentrates
produced, expected to be produced, or sold from operations.
(2) The Company has included the non-IFRS performance
measures cost per tonne milled, cash cost, cash cost
per Ag eq oz, AISC, AISC per Ag eq oz, mine operating
earnings before non-cash items and adjusted EBITDA
throughout this document. Refer to the Non-IFRS Measures
section of the MD&A for an explanation of these measures
and reconciliation to the Company's reported financial
results in accordance with IFRS. As these are not
standardized measures, they may not be directly comparable
to similarly titled measures used by others.
(3) Average realized silver price is prior to smelting
and refining charges.
DISCUSSION OF FULL YEAR 2016 FINANCIAL RESULTS
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